Nearly peed into my pants laughing while reading this in the patch notes ...

[Enkidoh]

I'm scared to ask but

...What's Parley? Is this a returning thing from 1.0 I've never heard of before?

This. And yes it was awfully implemented (as SolArisa said it was a way for Disciples of the Hand and Land to undertake the storyline - other story battles had either npcs you had to direct, or an actual npc fighter called a Path Companion do the fighting for you). It wasn't that good due to being poorly executed (you could only use in a few specific instances, and there was basically no tutorial in how to play as it - you simply were given and it was left up to you to figure out on your own). But then, that was indicative of 1.0 in general.